Building An IT Partner Channel In A Land Of Giants
Using a channel model of independent distribution partners and resellers to help find, win and grow loyal customers has a long tradition in the IT sector. For many, the indirect channel has significantly contributed to global success, but for many newcomers, making it work remains a constant struggle with disappointing returns. Today, we are sharing our thoughts on the challenges for a growing software or hardware vendor trying to establish an IT channel partner base in EMEA. With our founders having over 25 years each working the IT channel from both sides of the fence, we will share with you how to most effectively get your products known, with or without the distribution giants that have been around since the beginning.
While we agree that the channel is the most scalable way to get your products to market, things have changed in recent years. Technology and the Internet have changed how people consume data, and we have moved away from the humble telephone and glossy brochures. The Distribution Centers we once knew with a 500-strong sales floor are no longer. Brochures, well, they grace the bottom of our trade show bags until our next recycling run. Email marketing works, but it has to reach the right people with engaging content rather than being noise thrown into an inbox. If we are honest, most of the information that leaves a distributor destined for a reseller does not ultimately reach a buying audience. Your messaging will get lost amongst the other giants in this game, the tier 1 IT vendors, especially if your brand is relatively unknown.
In addition, the distributors are also out to make money from selling your products. They will only put your product on their books without you spending much money. Vendor marketing is a significant source of revenue and a P&L centre in its own right. You will undoubtedly be presented with an extensive shopping list of hard to measure marketing options and perhaps offered a whole or part-funded head to call on resellers about your products. It is like social media advertising today; you are not visible if you are not paying.
Suppose you decide to spend lots of money playing with these giants. They display your logo on their website, ask for a consignment of stock on a sale or return basis and then send a few emails to their reseller database. You may then find that the visibility of any campaign opens or clicks is unavailable to you, so there is no actionable data for your sales team to work on. If you would like to follow with a call-out campaign, your friendly giant may offer this as a costly outsourced option using their favoured telemarketing agency. We have to realise that distribution sales are very unlikely to promote your product as it is unknown actively, and many distribution sales staff are non-technical, so they work within their comfort zone. In most cases, the solution is already designed, and the products are already chosen, so most will sell what the end-user has asked their reseller to provide.
So if you are a new vendor, perhaps having secured your third round (Early stage/B) or fourth round (Expansion stage/C) of funding and are ready to push your products now, you may be reading this and thinking, OK, so how do I scale and build a sales pipeline that will make us worthy of attention in the channel.
Here is our staged approach to establishing your brand as a newcomer looking to succeed in the IT channel.
Stage One: Understand your customers and deliver valuable content.
The essential first step is to ensure you fully understand your target customers to develop messaging that positions your brand as a compelling new way for them to address their challenges. This sounds like Marketing 101, but it is shocking how many start-ups must clearly explain the value their solutions bring. Many have been so entrenched in developing their products that they fall into a ‘product features’ mindset rather than focusing on customer value. We work with our clients to create impactful messaging using techniques such as animation, video and infographics. It is claimed that people remember 80% of what they see and only 20% of what they read, so don’t fall into the trap of creating long text-based content at the early brand awareness stage.
Stage Two: Work smart and deploy cost-effective methods to reach your audience.
Next, you need to determine ways to reach your audience. We must do this ourselves because we cannot rely on the IT reseller channel to help us at this stage. Our approach would evaluate multiple angles that may include customer data acquisition from trusted industry-specific sources, innovative and cost-effective use of digital channels and techniques, regional PR with effective pre-pitching of press releases to crucial industry journalists and analysts (PRNewswire is not practical in EMEA), promotion of impactful content across multiple channels and in each case with a specific call-to-action. The key is that we are now in control of our marketing campaigns and can measure the return on investment, unlike the high-cost distribution campaigns that need to be more fully transparent. Plus, we are now starting to build our customer base that we can re-market to to move them towards the end goal of selecting our products.
Stage Three: Build your customer base through measurable campaigns so that the IT channel needs you on their line card
Finally, having started gaining traction from our own merits, we need to start looking for resellers that address the industry sectors we are targeting or, better still, carry solutions that are complimentary to ours and may provide some market pull-through. Sales can be taken directly in the early stages, but selecting a Master Agent may be a good option at this point. Having driven our brand from the ground up by making lots of noise with the key purchasing decision-makers in our target sectors, we should be able to provide resellers with leads that will undoubtedly command their attention.
Fill your skills gaps and compliment your team with The Plexus Way.
Of course, the three stages above are very high; one size never fits all. Also, our process illustrates a significant challenge for any newcomer order to undertake a multi-faceted campaign driving a new brand into a unique geography requires a wide range of skills: marketing strategy, content creation, graphical design, digital marketing, PR and, of course, an intimate knowledge of the EMEA IT channel.
You may not have these skills in-house; you may still need physical presence in EMEA. We often find a lonely sales or business development head based in a region trying to build a channel alone or with support from a single marketing resource in a time zone, perhaps eight or more hours behind.
This is where The Plexus Way can help. We can provide access to all of the skills required to establish your brand in the channel for less than the cost of a single marketing hire but without the HR overheads or any fixed-term contracts. Our model can also complement your sales and marketing operations globally.
Once you start to establish your partner channel, we move into the realm of channel partner management with a whole new set of challenges. We will discuss this in a future blog article, so stay tuned.
Contact us today for an informal chat about your goals and objectives for expanding your IT solutions footprint in EMEA. Even if you are still getting ready for The Plexus Way, you may come away with some valuable ideas you can set in place immediately.